Grand jury to look at California power pricing

LOS ANGELES, California (CNN) -- A grand jury will convene in Sacramento next month to look into pricing practices for electricity and natural gas in California, state Attorney General Bill Lockyer said Wednesday.

"A criminal grand jury will be convened in early July in our efforts to get at the truth about energy pricing practices for electricity and natural gas that hit California pocketbooks hard," Lockyer said in a statement.

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Gov. Gray Davis accused energy providers of price gouging when the state was grappling with rolling blackouts earlier this spring. Davis has since negotiated long-term energy contracts for the state that he believes will help stabilize California's energy problems.

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Lockyer said he hopes the grand jury will help determine if California consumers were paid more than they should have for energy.

"Through the grand jury in Sacramento, we will further focus our criminal probe to determine whether the California market was manipulated and profits taken illegally, and whether there was fraud against the public," Lockyer said. Sacramento is the California capital.

The state deregulated its electricity market in 1996. Under deregulation, the state's investor-owned utilities sold most of their power generating plants. Now they must buy back that power at market prices.

Wholesale prices of electricity have skyrocketed, jumping from an average of $30 per megawatt hour last year to $330 in January.